Prioritise imports transactions, says mining equip supplier
A MAJOR supplier of mining equipment has called on the Government to come up with a priority list of foreign currency allocations towards timely importation of critical raw materials.
Given the foreign currency shortage in the country, the supplier argued that delays in addressing the situation leaves miners in a precarious position.
Operations director at Midlands Metals, Mr Tatenda Karimazondo said critical sectors such as mining need a consistent supply of raw materials from outside the country, which cannot be sourced locally.
He said delays in clearing transactions has resulted in the company failing to meet some of its orders locally.
“We also need to look at those companies, which act as substitute for imports. In the same vein that we are putting emphasis on exports, must we focus on local manufacturers so that we are not in a position where companies are forced to import things that could have been manufactured locally,” said Mr Karimazondo.
“For instance we are supplying the gold industry and they are one of the biggest foreign currency earners for the country and we are saying that if we are not supported and you only focus on the gold mining companies then it means we will close down and force the gold miners to import products, which we have been supplying locally.”
Midlands Metals is the only remaining iron and steel manufacturer in Gweru and supplies $5 million worth of equipment to the gold mining sector annually.
Another steel manufacturer, Steelmakers said the continued shortages of ferromanganese at its Redcliff plant would result in depressed production if the central bank does not intervene.
A number of manufacturing companies such as Delta Beverages and telecommunications giant Econet Wireless, have also raised the red flag regarding delays in paying foreign suppliers due to cash shortages in the economy.
Fuel service providers and power utility, Zesa, have also raised similar concerns.
Delays in foreign payments are linked to the depletion of nostro reserves as a result of cash shortages in the country.
The Reserve Bank of Zimbabwe has come up with incentives to encourage exporters who include players in the mining sector who have significantly contributed to the country’s export earnings.
A five percent incentive for exports is being paid by the central bank to exporters in the form of bond notes, which were introduced in the market recently.